Construction delay claims in the UAE are determined primarily by the construction contract, the cause of delay, compliance with notice requirements and evidence showing the effect on the contractual completion date. Under the current legal framework, Federal Decree-Law No. 25 of 2025 Promulgating the Civil Transactions Law applies from 1 June 2026 and contains important rules on contractual performance, agreed compensation and construction contracts.
A contractor affected by an employer-risk delay may be entitled to an Extension of Time (EOT) and, where the contract or law supports it, additional compensation. If the contractor is responsible for late completion, the employer may seek liquidated damages or other contractual remedies.
These are separate questions. An extension of time protects the completion date, but it does not automatically create a right to recover delay costs.
Al Ramsy Advocates advises developers, contractors, subcontractors and consultants on construction delay claims and construction law in the UAE.
What Is a Construction Delay Claim?
A construction delay occurs when an event affects the planned progress or completion of the works.
However, not every late activity creates a valid delay claim.
A construction delay claim normally requires analysis of:
- what caused the delay;
- who assumed that risk under the contract;
- whether the event affected project completion;
- whether the required notice was issued;
- whether the delay was mitigated; and
- what time or financial relief is available.
There are usually three different forms of relief to consider:
| Claim | Main Purpose |
|---|---|
| Extension of Time | Moves the contractual completion date |
| Prolongation / delay costs | Seeks additional costs caused by compensable delay |
| Liquidated damages | Employer’s agreed remedy for contractor-caused late completion |
These should not be treated as the same claim.
When Can a Contractor Claim an Extension of Time?
Extension of time claims depend first on the wording of the construction contract.
Common delay events that may support an EOT include:
- late access to the site;
- delayed drawings or instructions;
- employer variations;
- delayed approvals;
- suspension caused by the employer;
- interference by the employer or its other contractors;
- unforeseen events allocated to the employer’s risk; and
- exceptional events covered by the contract.
The contractor must normally prove that the event affected the Time for Completion, not merely that one activity took longer than expected.
For example, a drawing may be issued 20 days late, but if the affected work had sufficient float and project completion was not delayed, a 20-day EOT does not automatically follow.
This is why EOT claims usually require programme and critical-path analysis.
For projects still at contract stage, clear delay and notice clauses should be addressed in the construction contract rather than left until a dispute develops.
Does an EOT Automatically Include Compensation?
No.
This is one of the most important distinctions in delay claims in construction.
An EOT gives additional time. A claim for money requires a separate contractual or legal entitlement.
An event may therefore be:
- time only — EOT but no additional payment;
- time and money — EOT plus compensable prolongation costs; or
- no relief — where the risk remains with the contractor.
The actual contract must be checked before assuming that an employer-caused event automatically produces both time and compensation.
Notice Requirements for Construction Delay Claims
Notice can determine whether a strong claim survives.
Many UAE projects use FIDIC-based contracts, but the exact edition and Particular Conditions matter.
FIDIC 1999
Under the standard 1999 FIDIC claims procedure, Sub-Clause 20.1 generally requires the contractor to give notice within 28 days after becoming aware, or when it should have become aware, of the event or circumstance giving rise to the claim.
The standard form then provides a 42-day period for the detailed claim, subject to the wording of the contract.
FIDIC 2017
The 2017 FIDIC suite uses a different claims procedure.
Sub-Clause 20.2 generally retains the 28-day Notice of Claim, while the fully detailed claim is generally required within 84 days from awareness of the event or circumstance.
The parties frequently amend these provisions.
A project team should therefore never rely on a generic statement that “FIDIC gives 28 days” without checking:
- the FIDIC edition;
- Contract Data;
- Particular Conditions;
- amendments to the claims clause; and
- any project-specific notice requirements.
Why Is the Notice Deadline Important?
The Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC case before the DIFC Court of Appeal demonstrates the importance of contractual time bars.
In that case, the court treated the contractual 28-day notice requirement as a condition precedent to the contractor’s EOT and additional-payment entitlement.
The decision concerned the wording of the particular contract before the DIFC Courts. It should not be treated as a statutory rule imposing a universal 28-day period on every UAE construction contract.
The practical lesson is simpler: read and follow the actual notice clause from the start of the delay event.
How Do You Prove a Construction Delay?
A contractor does not prove a delay claim simply by showing that the project finished late.
The claim should establish a clear connection between:
Delay event → affected activity → critical path impact → delayed completion
Important programme evidence can include:
- accepted baseline programme;
- updated programmes;
- progress reports;
- site diaries;
- instructions and variation orders;
- RFIs;
- drawing registers;
- approval logs;
- correspondence;
- meeting minutes;
- manpower and equipment records; and
- contemporaneous delay notices.
Depending on the dispute, a delay expert may use techniques such as time impact analysis, windows analysis or comparisons between planned and actual progress.
There is no single delay-analysis methodology that automatically applies to every UAE project.
The appropriate method depends on the contract, available records, programme quality and the nature of the delay.
What Happens if Both Parties Caused Delay?
This is usually described as concurrent delay where employer-risk and contractor-risk events affect completion during the same period.
There is no single statutory formula under UAE law stating that every concurrent delay must be treated in the same way.
The result can depend on:
- the contract;
- whether the delays were genuinely concurrent;
- the critical-path evidence;
- each party’s contribution;
- the wording dealing with EOT and compensation; and
- the remedy being claimed.
For example, entitlement to additional time and entitlement to prolongation costs do not necessarily produce the same result.
The contractor should therefore separate:
- the number of days claimed as an EOT;
- the period for which additional cost is claimed; and
- any period for which the employer seeks liquidated damages.
Simply splitting a concurrent period 50/50 is not a general rule under UAE construction law.
Liquidated Damages for Construction Delays
Liquidated damages in construction are agreed amounts payable for specified contractual breaches, commonly late completion.
The current UAE Civil Transactions Law addresses agreed compensation in Article 340.
The parties may agree compensation in advance, but the contractual amount is subject to the statutory rules.
The court may reduce the agreed compensation where the debtor proves that:
- the amount is excessive; or
- the original obligation was partly performed.
The court may also reduce compensation where the creditor’s own fault contributed to the occurrence or increase of the damage. If the creditor’s fault predominates, the court may refrain from awarding the agreed compensation.
A creditor may seek more than the agreed amount where fraud or gross fault is proved.
Any agreement attempting to exclude the operation of Article 340 is ineffective.
Does the Employer Have to Prove the Exact Agreed Amount of Loss?
An agreed damages clause is intended to set the amount contractually in advance.
However, Article 340 expressly gives the court power to adjust that agreed compensation in the circumstances stated in the law.
For a delay dispute, evidence can therefore become important where the contractor argues that:
- the agreed amount is excessive;
- part of the obligation was performed;
- the employer contributed to the delay; or
- the contractual amount should otherwise be adjusted under Article 340.
Construction contracts still referring to Article 390 of the former Civil Code should be reviewed because the current agreed-compensation provision is Article 340.
When Can a Contractor Claim Construction Delay Compensation?
Construction delay compensation is usually claimed where an event for which the employer bears contractual responsibility extends the period during which the contractor must remain on site.
Depending on the contract and evidence, claimed prolongation costs may include items such as:
- additional site staff;
- extended site facilities;
- plant and equipment;
- temporary works;
- utilities;
- insurance;
- supervision;
- security; and
- other time-related project costs.
The contractor must prove both entitlement and quantum.
It is not enough to say that the project was extended by 100 days and multiply normal monthly costs by that period.
The claim should show that:
- the delay event was compensable;
- it actually extended the relevant project period;
- the costs were caused by that delay;
- the amounts were actually incurred or otherwise recoverable; and
- reasonable mitigation was undertaken.
Head-office overheads, financing costs and loss of profit can require separate analysis depending on the contract and evidence.
Where the dispute has already become contentious, construction litigation lawyers can assess both the contractual entitlement and the records supporting the claimed amount.
What Does UAE Law Say About Exceptional Delay Events?
The construction contract remains the starting point, but the current Civil Transactions Law also contains relevant statutory provisions.
Exceptional General Circumstances
Article 829(3) specifically addresses Muqawala contracts where unforeseen general exceptional circumstances disturb the contractual equilibrium between the employer and contractor.
Where its conditions are satisfied, the court may restore the contractual balance through measures that can include:
- extending the execution period;
- increasing or reducing the remuneration; or
- rescinding the contract.
This is a high-threshold statutory mechanism. It should not be treated as a general EOT clause for ordinary project delays.
Force Majeure
Article 236 deals with force majeure where performance of an obligation becomes impossible.
Difficulty, additional expense or ordinary delay does not automatically amount to impossibility.
A project affected by an exceptional event should therefore be analysed under both:
- the specific contract provisions; and
- the applicable statutory rules.
What Evidence Should Be Kept for an EOT or Delay Claim?
A strong claim is usually built during the project rather than reconstructed years later.
Contractors and employers should preserve:
- the signed construction contract and amendments;
- baseline and revised programmes;
- delay notices;
- EOT applications;
- Engineer determinations;
- variations and instructions;
- daily and weekly site reports;
- correspondence;
- meeting minutes;
- drawing and approval registers;
- procurement records;
- photographs;
- labour and plant records;
- invoices and cost records; and
- documents showing mitigation or acceleration measures.
Contemporary records are particularly important because they show what was happening when the delay occurred, rather than relying solely on later explanations.
How Are Construction Delay Disputes Resolved?
The first step is to follow the dispute procedure in the construction contract.
Depending on the agreement, this may involve:
- Engineer or contract administrator determination;
- negotiation;
- dispute board procedures;
- settlement discussions;
- arbitration; or
- court proceedings.
Large construction disputes frequently involve both legal and technical evidence, including expert delay and quantum analysis.
Where the contract contains a valid arbitration agreement, the dispute may ultimately be handled through construction arbitration in the UAE.
Before starting formal proceedings, the parties should identify separately:
- the EOT entitlement;
- the compensable delay period;
- the claimed prolongation costs;
- any concurrent contractor delay;
- the employer’s liquidated damages claim; and
- whether contractual notice requirements were satisfied.
Keeping those issues separate usually makes the construction delay claim much clearer.
Frequently Asked Questions
What are construction delay claims in the UAE?
Construction delay claims concern time or financial relief arising when events affect project completion. A contractor may seek an extension of time, compensation or both, while an employer may seek liquidated damages for contractor-caused delay.
How long do I have to submit an EOT claim?
The deadline depends on the contract. Standard FIDIC 1999 and 2017 forms generally use a 28-day initial notice period, but their later detailed-claim procedures differ and Particular Conditions frequently amend the standard wording.
Does an extension of time entitle a contractor to additional money?
Not automatically. EOT entitlement and financial compensation are separate. The contractor must identify a contractual or legal basis for recovering delay or prolongation costs.
Can liquidated damages be reduced in the UAE?
Yes. Article 340 of the current UAE Civil Transactions Law allows agreed compensation to be reduced in specified circumstances, including where the amount is excessive, the obligation was partly performed or the creditor contributed to the damage.
What documents are most important in a construction delay claim?
The construction contract, notices, baseline and updated programmes, progress records, instructions, variation documents, correspondence, site records and financial evidence are among the most important documents.
